Correlation Between MOBILE FACTORY and Aqua America

Can any of the company-specific risk be diversified away by investing in both MOBILE FACTORY and Aqua America at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MOBILE FACTORY and Aqua America into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MOBILE FACTORY INC and Aqua America, you can compare the effects of market volatilities on MOBILE FACTORY and Aqua America and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in MOBILE FACTORY with a short position of Aqua America. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOBILE FACTORY and Aqua America.

Diversification Opportunities for MOBILE FACTORY and Aqua America

0.07

Correlation Coefficient

MOBILE FACTORY  Aqua America

Significant diversification

The 3 months correlation between MOBILE and Aqua is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding MOBILE FACTORY INC and Aqua America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqua America and MOBILE FACTORY is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on MOBILE FACTORY INC are associated (or correlated) with Aqua America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqua America has no effect on the direction of MOBILE FACTORY i.e., MOBILE FACTORY and Aqua America go up and down completely randomly.

Pair Corralation between MOBILE FACTORY and Aqua America

Assuming the 90 days horizon MOBILE FACTORY INC is expected to generate 1.07 times more return on investment than Aqua America. However, MOBILE FACTORY is 1.07 times more volatile than Aqua America. It trades about 0.04 of its potential returns per unit of risk. Aqua America is currently generating about -0.34 per unit of risk. If you would invest  555.00  in MOBILE FACTORY INC on October 26, 2024 and sell it today you would earn a total of  5.00  from holding MOBILE FACTORY INC or generate 0.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MOBILE FACTORY INC  vs.  Aqua America

MOBILE FACTORY INC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MOBILE FACTORY INC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, MOBILE FACTORY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aqua America

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aqua America has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with MOBILE FACTORY and Aqua America

The main advantage of trading using opposite MOBILE FACTORY and Aqua America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOBILE FACTORY position performs unexpectedly, Aqua America can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Aqua America will offset losses from the drop in Aqua America's long position.

The idea behind MOBILE FACTORY INC and Aqua America pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.